Carefully, True Value embraces e-commerce

How is True Value Co. rolling out its e-commerce program this fall? Based on interviews with executives and rank-and-file members at the Chicago-based co-op’s Fall Market in Las Vegas, the answer is: “very carefully.”

“We tried to think about every possible nuance, and created a solution and provided the answers for the retailers,” said Carol Wentworth, VP marketing.

The nuances of successful multichannel retailing are formidable, and complicated in True Value’s case by the co-op model of individual owner members. For a glimpse of just how formidable, Home Channel News attended one of several “Get on Board with E-Commerce” seminars offered during the market.

The nature of the questions shows the dealers didn’t just think of this stuff yesterday. Retailers honed in on potential trouble spots such as returns, price matching, online product mix and damaged products. And with each question, e-commerce director Lisa Fortuna calmly explained the strategy and the policy. For instance:

Amember in the front of the room asked about the proverbial “little old lady” whose grandson told her the online price of the product is lower than the store price. But what if she doesn’t have any verification? (Answer: The price can be verified through the POS, or through the new truevalue.com.)

Amember asked about customers who don’t follow directions and return items to the wrong store. Can they still be exchanged? (Answer: Stores will be able to look up that order in the truevalue.com Ship-to-Store Portal and initiate the return, with credit automatically accounted for.)

Of all the questions from the floor, there was really only one that stumped the panel. What if, a dealer asked, there is a grill on the floor that needs to be sold to clear up space. Then let’s say a customer orders the same grill online for a ship-to-store delivery. “When it comes in, can I sell him my grill and return yours without any grief?”

Through the laughter of the audience, Fortuna said she didn’t think she could answer that one.

Clearly, one can’t plan for every contingency. (Another issue to be worked out is how to handle shipments to Hawaii and Alaska.) But for the most part, True Value has done extensive groundwork, including a Q&A help sheet handout containing about 75 questions with detailed answers.

The level of planning extends right down to the orange stickers to be slapped onto e-commerce products shipped from the warehouse. “We tested the stickers a couple of weeks ago,” Fortuna said. “We wanted to make sure they were tacky enough to stay on the product, but as you peel them off they would be neat.”

In the audience, Dan Kiselev of Manoa True Value in Havertown, Pa., applauded the effort of True Value executives to work out a plan. He also referred to the competitive environment, which has Ace Hardware and Do it Best already up and running with e-commerce programs.

“There’s a saying: If you come late to the party, you should be the best dressed,” Kiselev said. “They’ve looked at what everybody else has done. They compiled it all, and now they’re putting it together. Their preparation has been very good.”

True Value Co. might object to the idea that it’s late to the dance. Actually, it explored the digital marketplace from 2000 to 2004 with an e-commerce initiative that had a direct-to-consumer approach. But the fact remains: Today people can buy product through DoItBest.com and AceHardware.com, but not TrueValue.com. That’s changing this fall.

“Our customer has a lot of choices relative to researching and purchasing home improvement products online,” Fortuna said. “Since we are reintroducing ourselves in the digital marketplace, we knew that we had to set the bar high to deliver the best experience possible for our customer.”

Customer expectations call for e-commerce, she said. “Our retailers were also asking us to create a presence online with our product assortment.”

True Value has no intention of putting amazon.com out of business. Instead, the goal is twofold: Build awareness of True Value, and drive traffic to member stores.

In addition to a free ship-to-store option, TrueValue.com will offer ship-to-home, which will carry shipping costs. It expects the former to be the most popular choice by far, increasing store traffic, generating new customers and offering opportunities for related sales.

True Value research showed 99% of home improvement retail sales happen in the store, but that 92% of shoppers research products online. Backed by those numbers, the company believes the biggest benefit will take place through product research.

“The primary purpose is to increase visibility for True Value,” Wentworth said. “And if they want to buy online, we’re going to help them do that. We’re going to make that easy; we want them to ship to store.

“We know from industry data, when you get the customer in the store to pick up that online order, they tend to spend more in the store when they get there,” Wentworth continued. “We want this to be linked with the local retailer—want them to get the visibility, them to get the credit for the sale and them to get the customer into the store.”

The retailer member captures the margin for the sale. For the co-op, the benefits include important feedback on merchandise and customer behavior.

“There will be a lot of information to mine,” Fortuna said. “What are the seasonal searches, what do they search for, and what do they do when they find it? The site allows customer ratings and reviews on our products.”

Dealers are being encouraged to sign up for ship-to-store certification. To get certified, dealers need to sign a program agreement, complete an online training course—with an estimated duration of 60 minutes—and pass the certification test. Partly to emphasize the need for training, the session includes videos captured by a mystery shopper service showing “the good, the bad and the ugly” of multichannel retailing.

Since the formal kickoff in July, some 900 dealers have signed up for ship-to-store certification.

Back at Manoa True Value, Kiselev said he was impressed by what he heard.

“It’s the cashiers and the guys and the girls in the aisle who are going to have to execute,” Kiselev said. “We have a Home Depot within a couple miles, and a Lowe’s being built nearby, too. We have very stiff competition, and this is something I think we need to do in order to stay competitive.”

TESTING, WITHOUT THE STRESSING

When rolling out its e-commerce ship-to-store program, True Value faced the challenge of encouraging the widest participation possible while ensuring a high standard of customer service to protect the True Value brand.

The solution was an online training course with a certification test, a process that takes about 60 minutes to complete. Basic training on handling ship-to-store customers, finding merchandise and dealing with returns is included in the course.

“Many times it’s high school and college-age cashiers who are greeting the customer,” said Linda Kuenning of Western Ohio True Value in Minster, Ohio. “They need to know what to do, so we can deliver that professional experience to the customer.”

Kuenning, a member of the 10-person E-Commerce Retailer Council, said everyone involved in the planning knew it wouldn’t work to simply unleash the program for stores to figure out. Neither could they ask members to dedicate days away from their stores.

Balancing convenient and effective training was an important consideration, according to True Value’s Lisa Fortuna, director of e-commerce. “It’s online training, so retailers can take it anytime they want,” she said. “We want it to be very simple. And we encourage staff to go through the training, too. The cashier should know just as well as the store manager where that product is and how to fulfill the order.”

Overall, Kuenning said the co-op has anticipated many of the issues facing retailers.

“We want to do it right,” Kuenning said. “It’s better to do it right than to do it fast.”